Fully rented income property great for townhomes or upgrading

This rental property offers a number of options for the real estate investor. Currently fully rented (all but one tenant is month-to-month), rent amounts are well below market rate for the area at $385, $385, $385, and $400. As things stand, the property offers a cap rate of 10%. That said, the property does need some work with the majority of it being on the exterior and cosmetics. So the best use will either be to renovate all the units and increase rents (projecting $650 a month on rents if fixed up nicely) or converting the building into townhomes. Located in a historic tax district, any significant renovation would be eligible for Federal and/or Missouri Historic Tax Credits, which would make the numbers work even better. No matter which route is taken, with a little TLC, this property could be a wonderful income generator.  There is also a large 3+ car garage in the back of the property that with a little work could be rented for additional income. Each unit has 4 rooms – living room, eat-in kitchen, bedroom, and bonus room. The 1st floor units feature walk through bedrooms with the 2nd floor units offering private bedroom space. Heating is provided via forced air furnaces with cooling coming from window AC.